The relentless news of crime, corruption and unseemly politicking is apt to lead many to question whether anyone is behind the wheel of South Africa’s economy. In the field of infrastructure development, however, there are encouraging indications of firm political will.
The Minister of Economic Development, Pravin Gordhan, introduced the Infrastructure Development Bill (“the Bill”) to the National Assembly on 13 November 2013. The Bill entrenches key mechanisms for coordinating and driving the country’s pipeline of strategic infrastructure projects. The idea is to fast-track these projects and to ensure that red tape does not impede progress.
There is much at stake, with finance Minister Pravin Gordhan announcing in last year’s (2013) budget speech that planned public sector spending over the next three years on infrastructure projects is R827 billion. The value of projects in progress or under consideration reportedly totals around R4 trillion.
The Bill will also formalize the Presidential Infrastructure Coordinating Commission, which is to be chaired by President Zuma himself. The Bill is retrospective to an extent, in that it gives powers to the Presidential Infrastructure Coordinating Commission which is already established and is already facilitating implementation of 18 strategic infrastructure projects, commonly known as SIPs.
Among these are the construction of the three power stations, Kusile, Medupi and the Ingula Pumped Storage Scheme and there is the logistics and industrial corridor linking Durban, the Free State and Gauteng. On this project, construction has already started on the container terminal at City Deep in Gauteng as has the upgrade of Pier 2 of the Port of Durban. Construction was completed on the Inkosi Dalibhunga Nelson Mandela Legacy Bridge which now connects Mvezo (the former president’s birthplace) to a new 10 km road leading to the N2.
Work is at an advanced stage on the De Hoop Dam, which is at the heart of a project to develop the Olifants River, and the Saldanha Bay Industrial Development Zone (“IDZ”) was recently launched. This project is expected to become the maintenance, service and supply hub for the booming African oil and gas sector on the West Coast.
In regard to all strategic infrastructure projects – including those yet to be identified – the Bill provides for practices and procedures that ensure co-operation between the three spheres of government and other stakeholders.
One controversial aspect of the bill is that it grants the Presidential Infrastructure Co-ordination Commission the power to expropriate land, or any right in any land, for the purpose of implementing a strategic infrastructure project. This power is qualified, however, by the requirement that any expropriation must be effected in accordance with the Promotion of Administrative Justice Act and the relevant provisions of the Constitution.
It is clear that hard work has taken place to make the fiscal room for long term infrastructure development. An abiding concern, however, is the potential sabotaging effect of ill-advised procurement practices. Reportedly, though, key government departments are pushing for a change in this area so as to relax the dominant focus on price in evaluating tenders. Potentially, a revised policy on how to spend will take into account industrial outcomes, on a case by case basis, with a view to maximising both economic and social benefits.
The Bill promises to bring in its wake many good things, not least the creation of thousands of jobs. The biggest official challenge will be sticking to the plan, as President Zuma himself said at the launch of the Saldhana Bay IDZ: “…We could easily divert……and it will cloud the important thing that is happening here today.